There is a tremendous amount of interest in the cryptocurrency markets, but the truth is that there are also criminals eager to take advantage of the interest by fleecing well-meaning investors of their hard-earned money. Recently, scammers were reportedly arrested—with the help of artificial intelligence (AI)—in South Korea after a running a Bitcoin Ponzi scheme for some time. The Ponzi scheme ran for around six months beginning in May 2018, Korea Joongang Daily reported.
The South Korean criminals were able to rob a staggering 56,000 people of over KRW21 billion (around $18.7 million). The scam was partially successful because it targeted elderly individuals who were not fully aware of cryptocurrency or the sector at all. The idea was that many retirees had the disposable cash to invest without the knowledge to ask many questions about the sector. They also even lured in investors with recruitment bonuses and cryptocurrency, as well.
Interestingly enough, the arrest wasn’t made by law enforcement, but by the Seoul Special Judicial Bureau for Law Enforcement, a group of civil servants that operate independently from the police. The CEOs of two websites, identified only by their surnames Lee and Bae, along with 10 others, were arrested.
Ultimately, an “AI investigator” was able to track down the website that was perpetuating the Ponzi scheme. The money was made through annual membership fees and members were incentivized to recruit others. The scheme also involved a cryptocurrency called the “M-coin,” which the leaders of the scheme claimed would triple in value quickly to various investors. The program was able to identify advertising patterns related to Ponzi schemes as well.
The civil servants were able to use artificial intelligence to target certain keywords and the overall pattern of a Ponzi scheme. Additional evidence was provided by an unnamed informant, as well.
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